How is Indiana property tax calculated?

Indiana starts with the gross assessed value (market value-in-use), subtracts deductions to get net assessed value, then multiplies by the local tax rate expressed per $100 of net value. Finally, the constitutional circuit-breaker caps the bill at a percentage of the gross assessed value, so your final tax is the lower of the calculated amount or the cap.

What is Indiana's 1% property tax cap?

Indiana's constitution caps property tax bills as a share of gross assessed value: 1% for owner-occupied homesteads, 2% for other residential property and agricultural land, and 3% for commercial, industrial, and personal property. These circuit-breaker caps mean a homestead worth $250,000 can never be billed more than $2,500 in property tax, regardless of the local rate.

What are the Indiana homestead deductions?

An owner-occupied primary residence gets two deductions. The standard homestead deduction is the lesser of $48,000 or 60% of the home's gross assessed value. The supplemental homestead deduction then removes 35% of the value remaining after the standard deduction (25% on any remainder above $600,000). Together they substantially lower the net assessed value that is taxed.

Where do I find my net tax rate?

Your taxing district's rate is printed on your property tax statement and published by your county auditor and the Indiana Department of Local Government Finance. It is expressed per $100 of net assessed value and typically ranges from about $1.50 to $4.00 depending on local schools, libraries, and services. Enter your actual district rate for the best estimate.

Does this include the mortgage deduction?

No. Indiana repealed the mortgage deduction effective with taxes payable in 2023, so it no longer reduces assessed value. This estimator therefore omits it and relies on the homestead standard and supplemental deductions, which were increased when the mortgage deduction was removed.

Indiana Property Tax Estimator

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Indiana’s property tax system has a feature most states lack: a constitutional circuit-breaker that caps your bill at a fixed share of your home’s value no matter how high the local rate climbs. Combined with generous homestead deductions, this keeps Indiana homeowner taxes among the more predictable in the country. This estimator walks the full calculation — deductions, rate, and cap — to show your likely annual bill.

How it works

The bill is built in three steps:

Net assessed value = Gross AV − homestead deductions Tax before cap = Net AV × (district rate ÷ 100) Final tax = min(Tax before cap, cap%) where cap% is 1% / 2% / 3% of gross AV

For a homestead, the deductions are the standard deduction (lesser of $48,000 or 60% of value) plus a supplemental deduction of 35% of the value remaining after the standard deduction.

The Indiana specifics

Circuit-breaker caps. 1% of gross value for homesteads, 2% for other residential and farm, 3% for commercial. The final bill can never exceed this.
Homestead deductions. Standard + supplemental deductions sharply cut the taxable net value of an owner-occupied home.
No mortgage deduction. Repealed for taxes payable in 2023; the homestead deductions were raised to compensate.

Worked example

A $250,000 homestead in a district with a $2.20 per $100 net rate:

Standard deduction = min($48,000, 60% × $250,000 = $150,000) = $48,000
Supplemental = 35% × ($250,000 − $48,000) = $70,700
Net AV = $250,000 − $118,700 = $131,300
Tax before cap = $131,300 × 2.20% = $2,888.60
1% homestead cap = $2,500 → final tax = $2,500 (the cap applies)

Note: This is an estimate, not tax advice. Net rates vary by taxing district and special assessments can apply. Verify your assessed value, deductions, and district rate with your county assessor and the Indiana DLGF at in.gov/dlgf.